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Hockey's strange road to entitlement enlightenment

Date

Australian Financial Review chief political correspondent

View more articles from Phillip Coorey

Shadow Treasurer Joe Hockey

Shadow Treasurer Joe Hockey Photo: Penny Bradfield

Since being sent to the Opposition benches in 2007, the Coalition has fought almost every effort by Labor to means-test or otherwise curb welfare entitlements.

The Howard government, while reducing personal taxes consistently, also took the entitlement mentality to new heights with the raft of so-called middle class welfare measures. 

Apart from supporting budget crackdowns on the proliferation of such benefits as the disability support pension, it has opposed any move by the government to go after so-called middle-class welfare, moves the government says are vital to keep spending sustainable.

Measures which created structural deficits such as the private health insurance rebate, the baby bonus or the family tax benefit system have been capped or means tested by Labor and the Coalition has opposed or criticised all of them.

Furthermore, it has promised to remove the means tests and restore the rebates if re-elected and is promising a few more entitlements of its own, the most significant being the $3.1 billion paid parental leave scheme, to be funded by a tax on business with a small top-up from the budget.

Therefore, it is more than a little strange for the shadow treasurer, Joe Hockey, from the relative safety of London, to give a speech and TV interview railing against the age of entitlement in Western nations and arguing for the need to tighten up.

"Western communities, Western societies are going to have to make some very hard and unpopular decisions to wind back the involvement of the state in peoples lives," he said.

Hockey's criticisms were largely aimed at European nations and their generous welfare systems but, he said, it also applied to Australia.

"We need to be ever-vigilant. We need to compare ourselves with our Asian neighbours where the entitlements programs of the state are far less than they are in Australia," he said.

A lower level of entitlement "reduces taxation, meaning individuals spend less of their time working for the state and more of their time working for themselves and their family".

The shadow treasurer singled out compulsory superannuation as an example of easing the burden on the state.

"Over the years, governments have worked to reduce the exposure of the government to our pension system with the compulsory superannuation contribution program which means that people are contributing to their own pension rather than everyone relying on the government for the pension."

No mention that the Coalition opposed compulsory superannuation when Paul Keating introduced it and, most recently, it voted against lifting the rate from 9 percentage points to 12 as part of the mining tax package.

The Howard government, while reducing personal taxes consistently, also took the entitlement mentality to new heights with the raft of so-called middle class welfare measures it introduced and which Labor has been paring back.

 

Hockey did concede that his criticism that entitlments in western democracies were "fuelled by short-term electoral cycles and the political outbidding of your opponent'' applied to the programs set up under the Howard government.

In isolation, everything Hockey said made rational economic sense and it will do his standing no harm with the right of the Liberal Party.

Hockey has started to portray himself as the economic hardliner in the Coalition. This builds on his resistance, both internal and external, to further subsidies for the automotive industry and his pledge, that if elected, to  not subsidise industries the Coalition believes to be unsustainable.

But the approach lacked consistency with much of what the Coalition has said and done more broadly, suggesting there may be an internal struggle going on.

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311 comments

  • Well said Phillip.
    Joe Hockey's comments last night shows just how little the Liberal Party seems to care about voters.

    Commenter
    ozvamp
    Location
    Sydney
    Date and time
    April 19, 2012, 10:24AM
    • Joe loves everyone, you need tough love that's your problem. If the dollar doesn't go down to 50c US we're sunk. And it it does go down, there's your dose of tough love. The only reason the NZ dollar is so high is they are hiving off Australia. If Australia disappeared or NZ floated away to the South Atlantic ocean, their dollar would be 20c US.

      Commenter
      .bg
      Date and time
      April 19, 2012, 12:06PM
    • Phil, what's happened? Can this REALLY be a criticism of a non-labor mp? Got to show some even handeness I guess, participial after the massive stuff up on the Carr 'Non-appointment' that DID take place, along with the corresponding bagging of the PM's lack of authority etc etc.
      Admittedly, it is a mild bagging here, so all will be forgiven by your mates.

      Commenter
      Jim
      Location
      Bayside
      Date and time
      April 19, 2012, 12:23PM
    • So called middle class welfare is really about returning some of the taxes paid by people who pay significant amounts of tax and are also making a big contribution to the future of this country by having children.
      Couples who have taxable incomes of above $150k per annum and are raising children have been targeted by the government. This is despite the fact they are paying much greater amounts of tax than other individuals, have much greater living costs because they are raising children and whose children are the future of this country.
      If family payments was instead provided in the form of a tax offset, it wouldn't be called middle class welfare and there would be no controversy about these benefits to these parents.

      Commenter
      Anthony
      Location
      Ryde
      Date and time
      April 19, 2012, 1:23PM
    • The Liberals will only be happy when we have the same economic playing field as most of Asia - low levels of health care, poor water, poor sanitisation, poor use of natural resources, high pollution etc. The reason we have such a high standard of living and wages is that good roads, hospitals, clean water and power is an overhead in everything we do, its a part of the cost of everything we do. Liberals wont be happy until the labour unit is sleeping on the bare floor around a light bulb for warmth, theyre cheap and competitive then! And if the country is treated like the household budget, will he treat old and infirmed like the pet dog? Shoot it when its old and useless?

      Commenter
      DD
      Location
      South Melb
      Date and time
      April 19, 2012, 1:27PM
    • It doesn't matter what side of politics you are on, you've got to admit that what he is saying is correct in that just like real people, governments can't keep borrowing money (without any hope of repaying) in order to splash largesse on the general population. Interesting to note the "survey" results are probably in line with the next election - Liberal (yes) 51%, Labour (No) 43%, Greens (not sure) 6%.

      Commenter
      He's right and you know it
      Location
      Melbourne
      Date and time
      April 19, 2012, 1:39PM
    • No, he's not right. You can't just take away a safety net from everyone and expect them to survive. What is needed is to ensure that assistance is provided to those who NEED it, not to everyone; that is, means test benefits.
      And as Phillip notes, the Liberals keep opposing the government in applying means tests to benefits.

      Commenter
      ozvamp
      Date and time
      April 19, 2012, 2:03PM
    • Is rich coming from the party that invented middle class welfare to win votes.

      Commenter
      Wal
      Location
      perth
      Date and time
      April 19, 2012, 2:23PM
    • @Anthony | Ryde, it's people with an entitlement mentality like you who have caused the biggest welfare headache of them all. Sorry, but taxing higher income earners only to hand it back to them is just churn that gives jobs to public servants and allows the government to have a bigger barrel of pork to throw around.

      Raising kids isn't martyrdom and it's not some great sacrifice on behalf of the community. As a high income earner who doesn't have kids, I can assure you I get nothing from your kids I don't pay for, you on the other hand get free aged care from them, plus all those warm touchy feelings that people become parents for. People have children purely for their own benefit, stop making out like it's community service. You can pay for your own kids - we'd all be better off if governments collected less tax and had people pay their own way. Welfare should be for the poor and disabled, everyone else can dig into their own wallet, not mine.

      Commenter
      James from Brisbane
      Date and time
      April 19, 2012, 2:35PM
    • If you heard the interview last night you would have heard Joe say that he opposed the health fund rebate means test because otherwise all those people on hundreds of thousands a year will dump their private health insurance and put enormous pressure on the public hospital system.

      I can just imagine them all waiting 6 months or a year to be given the next available surgeon for an important operation. Yeah. Right.

      Joe was very careful not to nominate any specific welfare cuts though. Which means that Abbott and his merry Liberals will cut and slash wherever when they get into power. And raise the GST at the behest of their think tank, the IPA to further lower tax rates for the very wealthy.

      Commenter
      Johnno
      Date and time
      April 19, 2012, 2:41PM

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